ASX 200. Henry Jennings, Australian Market Wrap. Headlines, Stocks, Bonds, Economic & Asian Market News. END of DAY REPORT.

 

ASX 200 rose 47 points 6813 as miners rallied and banks turned around on rate cut hopes again. AGMs remain the focus. US futures rose points. Banks were again the weak sector until a closing kick as CBA rallied 0.4%, ANZ up 0.5% and WBC up 0.4%.NAB not so fortunate falling 0.2%. MQG rose 0.8% bucking the trend with the ASX rising 1.2% too by %. Insurers though still stuck in the slowlane with QBE up 0.3% and IAG up 0.5% Consumer discretionary stocks better again with WOW up 1.2% and WES up 1%. Miners were back in the winners circle today led by BHP up 0.3% and FMG up 2.6%. Gold miners too rose as SAR put away its SuperPit capital raising. NCM up 1.2% and NST up 3.2%. In company news, A2M had a great day up 11.2% following margin and sales growth. WTC dropped 7.7% after its AGM update with some awkward questions from JCapital again. EBO sold down 8.1% after Sybos sold 15m shares into a bookbuild. SAR remains in a trading halt as it continues to raise capital fro its SuperPit acquisition. In economic news, the RBA released its minutes from the November meeting and showed they thought about another cut, ANZ Roy Morgan consumer confidence fell again as confidence seeps out. 10-year bond yields 1.13% falling again. The AUD drifted lower to 67.98c. In Asia, Carrie Lam has made some concessions to the HK students for a peaceful conclusion, China rose 0.6%, HK rose 0.7% and Japan slipped 0.4%

  • ASX 200 up 47 to 6814.
  • High 6814 Low 6755. Below average volume.
  • Banks rally late, miners find buyers.
  • Healthcare in the pink, with consumer stocks in demand on cut hopes.
  • RBA admits it contemplated a rate cut on Cup day.
  • 10-year bond yields weaker at 1.18%
  • AUD higher at 67.98c
  • Aussie gold steady at $2162
  • Bitcoin falls to US$8153
  • US futures down 35 points.
  • Asian markets mixed with China up 0.6 % and Japan down 0.4%.

STOCKS                                               

  • WTC -7.69% short seller raises more question s following AGM. A ‘tiny blip.’
  • KGN -6.59% AGM comments.
  • EBO -8.07% major shareholder sell down.
  • TNE -4.62% tech stock sell off. Guidance missed some optimists hopes.
  • APT -2.82% Z1P -2.27% and NEA -2.82% as high PEs sell down.
  • APX -0.61% Bell Potter cops downgrade to hold.
  • PAR +11.61% written up in newsletter.
  • A2M +11.23% margin increases.
  • EHL +3.33% rally resumes.
  • RRL +3.82% director appointment.
  • PDL +3.61% buyers return.
  • PNV -3.27% profit taking continues.
  • PME -3.27% AGM presentations.
  • CUV -3.46% high PE stocks unwinding.
  • ADT +21.30% scoping study released.
  • RAP +14.81% buyers back in.
  • ALC +10.53% launches Miya MEMRe.
  • Speculative stock of the day: Esports (ESH) +30.00% Canva co-founder Cameron Adams joins Mogul board.
  • Biggest Risers: PAR, A2M, CNU, VRL, SIG, PLS, OML and RRL
  • Biggest Falls: EBO, WTC, LOV, KGN, TNE, CRN and CUV

TODAY

  • The a2 Milk Co. (A2M) +11.23% Guides H1 revenue between NZ$780-800m vs consensus NZ$763.1m at its AGM. Full-year EBITDA margin is now anticipated to be stronger than previously communicated and in the range of 29-30% reflecting improved price yield and a reduction in the cost of goods sold. The company has also extended its manufacturing and supply arrangement with Synlait Milk.
  • Kogan.com (KGN) -6.59% Trading update at AGM; October gross sales up 18.5% year on year. Gross profit was up 22.9% reflecting strong performance from Exclusive Brands and Kogan Marketplace. Operating costs were down 8.6% and active customers totalled 1.7m, indicating a 13.3% lift year on year.
  • Woodside Petroleum (WPL) +0.53% Revises production guidance to 89-91MMBoe vs prior guidance of 88-94 MMboe at investor day briefing. BHP and WPL have also agreed to terms to process Scarborough gas through WPL’s Pluto LNG plant.
  • Propel Funeral Partners (PFP) +1.27% Reports positive start to FY20 at AGM. The company repeated Q1 results and noted it is well placed for the remainder of FY20.
  • Sonic Healthcare (SHL) +2.06% Confirms FY20 EBITDA guidance between $1.12-1.14bn vs prior year’s $1.05bn result. Interest expense expected to fall 5% vs previous guidance of a 3% lift. Capital expenditure expected to be significantly lower in FY2020.
  • Saracen Minerals (SAR) will pay US$750m for Barrick’s half of the Kalgoorlie Super Pit. Analysts say that is a pretty big price. The company is tapping the market for $796m to fund the acquisition. The mine is run by Kalgoorlie Consolidated Gold Mines, a joint venture vehicle until now owned by Barrick and Newmont Goldcorp. Barrick has been a passive investor in the mine for some time and has gradually been pulling back from its Australian operations. The placement was being conducted at 295c a 13% discount and shareholders will get an entitlement offer. Lucky them.1 for 5.75 at 295c. SAR will also take on another $400m in its debt facility. Annual production for SAR will now be in excess of 605koz.
  • WiseTech Global (WTC) -7.69% Reconfirms FY guidance at its AGM. Expects revenue growth between 26-32% and EBITDA growth in the range of 34-42%. Short-seller J Capital has questioned the update, noting that WTC simply chooses to reiterate its assertion that “organic” growth is 33%. J Capital sees growth hovering around 10%.
  • Monadelphous Group (MND) +0.20% Provides outlook at AGM; expects FY20 revenue to show progressive growth and be skewed towards the second half. first-half revenue in FY20 is expected to be up on 2H19 and similar to pcp.
  • REA Group (REA) +1.16% Repeats expectations for revenue growth to be heavily skewed toward the second half at AGM. CEO Owen Wilson said the business was well-positioned to capitalise on an eventual market recovery.

ECONOMIC NEWS

ANZ-Roy Morgan consumer confidence fell by 1.1% to 109.9 points. Sentiment is below both the average of 114.3 points held since 2014 and longer-term average of 113.1.

RBA minutes from the November meeting. Click here for the full report. Some of the main points below:

  • While the outlook for the global economy remained reasonable, the risks continued to be tilted to the downside. Although there had been some recent progress in resolving the US-China trade and technology disputes, there was still the potential for re-escalation.
  • Global financial conditions remained accommodative.
  • The outlook for the Australian economy was little changed since August. After a soft period in the second half of 2018, GDP growth had picked up a little in the first half of 2019 and it appeared that a gentle turning point had been reached.
  • Employment had continued to grow strongly and had been matched by strong growth in labour supply.
  • In the September quarter, inflation had been broadly as expected at 1.7% over the year.
  • The Board agreed that a case could be made to ease monetary policy at this meeting, but that the most appropriate approach would be to maintain the current stance

HSBC has more than doubled its forecast for Australian property price increases next year now to rise by 5% to 9% in 2020, up from previously expected gains of 0% to 4%, Paul Bloxham, HSBC’s chief Australia and New Zealand economist wrote in a note today. HSBC is now forecasting gains of 8% to 12% in Sydney next year and 10% to 14% in Melbourne.

BOND MARKET

  • 2 – year bond yields down 2bps to 0.74%
  • 3 – year bond yields down 3bps to 0.78%
  • 10 – year bond yields down 3bps to 1.13%

ASIAN NEWS

  • Carrie Lam calls for a peaceful end to the siege at Hong Kong Poly. Underage students can walk free. Not sure about the old ones.

EUROPEAN AND US NEWS

  • The Trump administration has granted an extension for US companies to do business with blacklisted Chinese telecoms group Huawei.
  • Emirates has ordered 50 Airbus A350 jets worth $16bn at list prices.
  • Barrick Gold is selling its SuperPit asset as part of a US$1.5bn asset sale program.
  • US film studios will now be allowed to own cinemas and impose minimum ticket prices as part of a wind back of regulations by the DoJ.
  • Goldman Sachs has been hired to sell Russell Investments for around US$293bn as industry consolidation continues.
  • Kylie Jenner has sold a majority US$600 m stake in her beauty company to Coty.
  • Johnson and Corbyn go head to head tonight in first TV debate. Unmissable TV.

And finally…………….

 

A man in his mid forties bought a new BMW and was out on the freeway for a nice evening drive.

The top was down, the breeze was blowing through what was left of his hair and he decided to see what the engine had. As the needle jumped up to 160kph, he suddenly saw flashing red and blue lights behind him. “There’s no way they can catch a BMW,” he thought to himself and opened her up further. The needle hit 180, then 200, and finally reality hit him and he knew he shouldn’t run from the police, so he slowed down and pulled over. The cop came up to him, took his license without a word and examined it and the car. “It’s been a long day, this is the end of my shift and it’s Friday the 13th. I don’t feel like more paperwork, so if you can give me an excuse for your driving that I haven’t heard before, you can go.”

The guy thinks for a second and says, “Last week my wife ran off with a cop. I was afraid you were trying to give her back.”

“Have a nice weekend,” said the officer and he walked away.

 

A mature (over 40) lady gets pulled over for speeding…

Older Woman: Is there a problem, Officer?

Officer : Ma’am, you were speeding.

Older Woman: Oh, I see. Officer : Can I see your license please? Older Woman: I’d give it to you but I don’t have one.

Officer : Don’t have one?

Older Woman: Lost it, 4 years ago for drunk driving.

Officer : I see…Can I see your vehicle registration papers please.

Older Woman: I can’t do that.

Officer : Why not? Older Woman: I stole this car.

Officer : Stole it?

Older Woman: Yes, and I killed and hacked up the owner.

Officer : You what?

Older Woman: His body parts are in plastic bags in the trunk if you want to see. The Officer looks at the woman and slowly backs away to his car and calls for back up.

Within minutes 5 police cars circle the car. A senior officer slowly approaches the car, clasping his half drawn gun.

Officer 2: Ma’am, could you step out of your vehicle please! The woman steps out of her vehicle. Older woman: Is there a problem sir?

Officer2: One of my officers told me that you have stolen this car and murdered the owner.

Older Woman: Murdered the owner?

Officer2: Yes, could you please open the trunk of your car, please. The woman opens the trunk, revealing nothing but an empty trunk.

Officer2: Is this your car, ma’am? Older Woman: Yes, here are the registration papers. The officer is quite stunned.

Officer2: One of my officers claims that you do not have a driving license.

The woman digs into her handbag and pulls out a clutch purse and hands it to the officer. The officer examines the license. He looks quite puzzled.

Officer2 : Thank you ma’am, one of my officers told me you didn’t have a license, that you stole this car, and that you murdered and hacked up the owner.

Older Woman: Bet the liar told you I was speeding, too.

Clarence

XXXX

mt_tryforfree

Financial Markets and Political Commentary

 

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Henry Jennings Contact: henryjennings@mac.com // @henryj007 Has been involved in Investment Banking and Stockbroking since the early 1980's. Stockbroker - Camerons Stockbroking Macquarie Bank - Equity Capital markets Macquarie Group - Divisional Director